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Public holidays
Minimum Salary
€822.5 per month
About country

Fixed-term contract of employment

The fixed-term contract of employment is a temporary contract, i.e. Its duration and termination are previously determined and established by the employer and/or worker according to an event or time period.

It is used in the following situations:

  • direct or indirect replacement of an absent worker or a worker who is temporarily prevented from working for any reason
  • direct or indirect replacement of a worker who is involved in proceedings determining the legality of a dismissal
  • direct or indirect replacement of a worker who has been assigned non-active status for personal reasons
  • replacement of a full-time worker who is converting to part-time work for a determined period
  • a seasonal or other activity whose annual production cycle is irregular
  • exceptional increase in the company’s activity
  • performance of non-permanent occasional task or particular service.

The duration of such contracts may not exceed two years, and they may be renewed up to two times, provided their duration is not greater than one year and the initial conditions of the company’s temporary need continue.

Contract of employment of unspecified duration

The contract of employment of unspecified duration is also a temporary contract, but its termination is dependent on an event the date of verification of which is uncertain or unknown from the outset.

This type of contract has a maximum duration of four years, on conclusion of which the worker is entitled to compensation.

Contract of employment of indefinite duration

The contract of employment of indefinite duration indicates that, contrary to fixed-term contracts, the connection does not have a stipulated end. Also known as a contract of employment of unspecified duration, it is marked by not having a fixed duration, since it is in force without a pre-established time-limit. It does not relate to a temporary need of the company.

Short duration contract of employment

Very short duration contracts of employment respond to an exceptional and substantial increase in activity of a company whose annual cycle is irregular due to the respective market, or due to structural reasons that cannot be addressed by its permanent structure, particularly seasonal activity in agriculture or tourism lasting no more than 35 days and not exceeding 70 days per calendar year.

The employer must notify the competent social security service of conclusion of the contract and the place of work by means of an electronic form containing the following information:

  • identification, signatures and address or location of the parties
  • activity of the worker and corresponding remuneration
  • date of commencement of the work.

In the event of failure to comply with the rules, contracts are understood to last for six months.

Part-time contract of employment

A contract of employment is said to be part-time when the normal period of weekly work is less than that for a full-time post in comparable circumstances. Collective regulation instruments may establish the maximum percentage of full-time hours for work to be classified as part-time.

Temporary work

A working relationship in which a temporary employment undertaking hires and pays a temporary worker, placing them to work in another organisation which hosts, exercises authority over and manages them by delegation.

The law does not establish a minimum duration for temporary contracts of employment.

Temporary contracts of employment follow the same rules as those for fixed-term contracts (unspecified or specified).

Provision of services

This is a type of contract which is used by self-employed workers with their own businesses who carry out services for different clients.

In these cases it is the workers – or service providers – who have the obligation to pay tax.

Working hours

The maximum limits of the normal working period are from 8 to 40 hours, per day and per week respectively.

Annual leave and holiday pay

In each calendar year the worker is entitled to a period of paid holidays, which expires on 1 January. The worker is entitled to a minimum of 22 working days’ holiday per year.

For holiday purposes, working days are deemed to be the days of the week from Monday to Friday, public holidays excepted. If the worker’s rest days coincide with working days, Saturdays and Sundays which are not public holidays are considered for calculating days of leave, rather than the former.

If the calendar year ends before the worker has completed the six months, holidays can be taken by 30 June of the following calendar year. In that year, however, no worker may take more than 30 working days holiday, unless this is allowed by the collective labour regulation instrument.

Holiday pay corresponds to what the worker would receive if he or she were actually at work.  In addition to this remuneration, the worker is entitled to holiday pay, comprising basic pay and other elements of pay.

Pregnancy and maternity leave

Expecting mothers are entitled to up to 30 days of pregnancy leave before the birth and at least 6 weeks mandatory weeks after the birth of the child, between 17 and 21 weeks, for which the first 6 weeks after the birth are mandatory for the mother. The remaining 11 or 15 weeks can be shared between the parents.

Parental/paternal leave

Partner/paternity leave is up to 20 days, of which 10 days are compulsory within 30 days of the birth of the child and 5 days mandatory immediately after birth.

Other leave

  • Adoption or foster leave: upon adoption of a child under the age of 15 or have taken in a foster child, employees are entitled to the same amount of leave as under parental/maternity/paternity/partner leave.
  • Emergency and short absence leave: intended for unforeseen personal circumstances for which an employee has to take time off immediately. Examples include making arrangements for the care of a sick family member or in the event of a death in the family.
  • Unpaid leave: the employee may take unpaid leave in consultation with the employer on a full-time or part-time basis. There is no legal requirements to unpaid leave.
  • Special or extraordinary leave: may include leave for giving official notice of an intended marriage, marriage of a family member, moving house, funeral of a family member, a service or wedding anniversary, an interview or for consulting a doctor.

Trial Period

There is a probationary period in the initial stage of contracts of employment (variable according to type).

The duration of probation periods depends on the contract type. For contracts of indefinite duration, the statutory standard is 90 days. For positions that are technically complex, with high levels of responsibility, require special qualifications or in a position of trust it may be extended to 180 days. For fixed-term contracts probation periods are 30 days if contract duration is longer than 30 days and 15 days if shorter than six months.

Minimum Wage

Minimum Wage: €822,50 per month in 12 payments; €705 per month in 14 payments for all employees.

Payroll Cycle

In Portugal, employees get 14 months of salary payments each year:

  • 12 months of work
  • 1 Holiday allowance
  • 1 Christmas allowance

The allowances are paid with the same amount as a full month’s salary.

Both the Subsídio de Férias (Holiday Allowance) and the Subsídio de Natal (Christmas Allowance) get taxed the same as any other payment for IRS & Social Security.

Employees can choose to earn their salary in 14 payments, with the holiday allowance being paid during Summer and the Christmas allowance being paid around the Christmas period.

Conversely, workers can elect to be paid 12 times (“duodécimos”), with those two extra payments being pro-rated throughout the year.

The payments have to be paid at least once a month and by the last working day. 


Employer’s Contribution

In Portugal, taxes for employers total 26.5% and include 23.75% in social security contributions, 1.75% labour accident insurance, and 1% for the wage guarantee fund.

  • 23.75% – Social Security
  • 1.75% – Labour Accident Insurance
  • 1.00% – Wage Guarantee Fund (WGF)

The employer cost is generally estimated at 27.9% of the employee salary:

  • Social Security – 23.75%
  • Compensation fund – 1.0%
  • Work insurance policy – 1.4%
  • Labor accident insurance – 1.75%
  • Health at work – €120
  • Safety at work – €30

Employee’s Contribution

Employees in Portugal are taxed between 14.5% and 48% depending on their income bracket. Employees also make social security contributions of 11%.

  • 11% – Social Security

Employee Income Tax

  • 14.5% – Up to 7,112
  • 23.0% – 7,112-10,732
  • 28.5% – 10,732-20,322
  • 35.0% – 20,322-25,075
  • 37.0% – 25,075-36,967
  • 45.0% – 36,967-80,882
  • 48.0% – 80,882 and above
  • Portugal collects an additional solidarity rate between 2.5-5% on income that exceeds €80,000.

Termination of employment

Termination of the employment relationship can happen in the following ways:

  • Voluntary termination by the employee (resignation);
  • Retirement as per the employment contract;
  • Non-renewal of the employment contract or expiry;
  • Termination with just cause and no indemnity, for example in the case of theft or any other serious misconduct;
  • Collective dismissal due to economic reasons (f.ex. bankruptcy, restructuring, etc.); or
  • Termination by mutual consent.

Notice period

For an employee that has worked for less than 6 months, the notice period is 15 days, for between 6 months and 2 years it is 30 days and for employment longer than 2 years it is 60 days.

Cost of hiring an employee in Portugal
  • One-off set up costs
  • Monthly payroll processing
  • Company filings
Employment Classification

An employee is an individual person who provides professional services to a legal person in a subordinate relationship in exchange for remuneration. 

An independent contractor is an individual or legal entity that provides professional services to an individual or legal entity, typically to achieve a pre-defined outcome. There is no subordinate relationship in this case. The independent contractor will own their own tools to carry out the requirements of the work. 

Even if two parties agree on an independent contractor relationship the law can presume an employment relationship in the following circumstances: 

  • If the individual providing the services observes fixed hours set by the beneficiary of the services. 
  • If the beneficiary provides the tools and equipment
  • If the work is performed on the beneficiary’s premises
  • If there is a fixed and regular payment for remuneration to the individual in exchange for providing the services request by the beneficiary
  • If the person performing the services has a managerial role or has a authority role within the beneficiary company

Ultimately classification is determined by the courts in review of the circumstances 

For employment relationships that have been misclassified as independent contractors, both the employer and employee are required to pay any outstanding social security contributions. Misclassification is considered a serious breach of the law and be subject to a fine between €2,040-€61,200 depending on the severity of the breach. 

Essential information
  • Social Security
  • Employer Social Security
  • Population
    10,270,865 Million
  • Minimum vacation days
    22 days
  • Time zone
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